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Banking facility successfully renegotiated with RBS
32Red.com has successfully renegotiated its banking facility with Royal Bank of Scotland as part of a financial restructuring initiative. The online gambling group has entered into a revised loan facility with RBS for GBP 3.5 million, continuing a "constructive relationship" with the bank and using its revised gearing to form a sound financial platform for the next phase in the company's development.
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32Red also proposes to raise GBP3 million, before expenses, by way of a placing with institutional and other investors. The institutional part of the placing has been fully underwritten by Numis Securities Limited.
The agreement with RBS is conditional on shareholder approval being given for the placing at the company�s AGM to be held on 10 April 2007 and, as is the norm for such facilities, contains various covenants, including EBITDA, gross win and cash headroom to enable RBS to monitor the loan. RBS will also be receiving a warrant to subscribe for 560 000 ordinary shares in the company at 1p per share, in lieu of receiving banking fees associated with the loan.
12 million new Ordinary Shares at 25 pence per Ordinary Share will be offered. Numis, as agent for the company, has agreed conditionally to obtain subscribers for the placing shares, failing which to subscribe itself for the placing shares placed with institutional investors (which represents approximately 67 percent of the placing). The placing shares will represent 17.43 percent of the 32Red's enlarged issued share capital.
Certain of the directors, founding shareholders and their connected parties are displaying their confidence in the future by agreeing to subscribe for shares under the placing.
Commenting on the refinancing Ed Ware, Chief Executive Officer, said: �We are pleased that we have been able to successfully re-negotiate our banking facilities. With this completed and the recent new appointments of Martin Saunders and Jon Hale to the management team, we look forward to delivering on our plans to integrate the BetDirect business that we outlined at the time of the acquisition.�
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